A state appellate court has dealt a blow to Walmart's strategy of using petition drives to push through approval of new superstores while avoiding California's environmental law.

In a cookie-cutter pattern documented by California Watch, the mega-retailer bankrolled local signature-gathering efforts to build superstores or repeal restrictions on big-box stores in five California cities last year. Once 15 percent of local voters signed the petitions, city councils either had to approve the projects or hold a special election, which can be costly.

Walmart then urged cities to approve the petition rather than send it to voters, angering some officials who felt bullied.

Walmart has said the strategy is necessary to avoid politically motivated lawsuits under the California Environmental Quality Act.

Walmart's case

Voter-approved ballot measures that stem from petitions are exempt from environmental review and protected from lawsuits filed under the environmental act. Walmart argued that when a city approves one of its petitions without an election, the project is protected, too.

But in a strongly worded opinion, a three-judge appellate panel ruled late last month that the landmark environmental law still applies.

"The legal issue is important and calls for speedy resolution," said the Fifth District Court of Appeal in Fresno. "Developers' strategy of obtaining project approvals without environmental review and without elections threatens both to defeat CEQA's important statutory objectives and to subvert the constitutional goals of the initiative process."

Conflict with '04 case

The Fifth District panel disagreed with a 2004 ruling by a different appellate court, setting up the possibility that the issue will ultimately be resolved by the California Supreme Court.

The Fresno court held that a petition signed by 15 percent of a city's voters doesn't carry the same power as a majority-approved ballot initiative. "To hold otherwise would authorize rule by a few - the antithesis of democracy," the court said.

The case centers on a Walmart expansion project in Sonora (Tuolumne County). Attorneys who often target Walmart with environmental lawsuits have sued over the company's use of the initiative process there, as well as in Milpitas and the San Bernardino County town of Apple Valley.

Sonora argued in court filings that its citizens supported the proposed superstore, so there was no point in holding an election. Walmart argued that it would be unfair to "force city councils to incur unnecessary and unwanted expenses to hold elections."

'Will of the people'

The city's and company's positions reveal "their failure to appreciate the importance of elections in the initiative process," the Fifth District panel said in its ruling. "The results of an election represent the will of the people. A petition signed by 15 percent of the voters does not."

"These people just want to delay a process that should be part of a free-market economy," he said. "I don't think it's the city's role to decide who can compete."

Walmart spokeswoman Delia Garcia said the existing Sonora store "has served customers faithfully and made a positive impact on the local economy."

"We are committed to providing customers the broadest selection of products to meet their family's needs and will evaluate all options for moving forward," Garcia wrote in an e-mail.

The court's ruling goes beyond Walmart, said Brett Jolley, the attorney who brought the suit.

'Major loophole' closed

"The opinion closes what could have been a major loophole in the CEQA process, which would have allowed the wealthiest developers ... to avoid CEQA and public elections by utilizing the initiative process," he wrote in an e-mail.

Walmart has had mixed success at the ballot box. Voters in Inglewood (Los Angeles County) shot down the company's proposed superstore in 2004. But the residents of Menifee (Riverside County) approved a Walmart ballot initiative last year.